To create a corpus for infrastructure projects in the metropolitan region and reduce the extent of viability gap funding (VGF) to be paid to the developer, the Maharashtra government is planning to increase the floor space index (FSI) at stations for the Mumbai Metro to four (from two now) in the 500 hundred meter radius of the station.
The FSI indicates the total construction allowed on a particular plot of land. That is, if the FSI is two and the plot size is 1,000 sq ft, the maximum construction is allowed on that plot is up to 2,000 sq ft.
However, unlike the Hyderabad Metro that attracted an upfront payment of Rs 1,250 crore for project development from Maytas Infra, a consortium promoted by Ramalinga Raju of Satyam group and others, the Maharashtra government is not expecting any upfront payment, according to government sources.
“It is not possible to get upfront payment from the Mumbai Metro because it will have to compete with other systems of mass transport like suburban trains and bus service,” explained a senior official with the Maharashtra government.
As per estimates of the Mumbai Metropolitan Regional Development Authority (MMRDA), a nodal agency for the Mumbai Metro project, the Maharashtra and Central governments will have to fork out VGF to the tune of Rs 4,500 crore during the first phase of the Mumbai Metro. This includes Rs 650 crore for the first line – Versova-Andheri-Ghatkopar and another Rs 1,200 crore for the second line – Charkop-Bandra-Mankhurd.
A senior official from the urban development ministry said that allowing four FSI at the station will help the developer to bring down the VGF because he will be able to make profits from the excess FSI.
Also, allowing it within 500 meters of the station will allow both the state government and the Brihanmumbai Municipal Corporation (BMC) to generate funds for the infrastructure projects. “There would a premium attached to this extra FSI, creating revenues that will be equally divided between state government and BMC,” he added.
In Mumbai, the MMRDA is following a pattern of equity participation in the project. It has picked up or will pick up stake in the special purpose vehicles (SPVs), which will be created for implementation Metro corridors in lieu of land and other services.
At present, MMRDA has picked up 26 per cent stake in the SPV formed by Anil Ambani-controlled REL’s Mumbai Metro.
